Page 64 - Accountancy for Advanced Secondary Schools Teachers Guide Form Five

(b) Journal entries: Provide examples of journal entries for both
licensors and licensees to record royalty transactions.

(c) Disclosure requirements: Discuss the disclosure
requirements for royalties in financial statements, ensuring
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transparency.

6. Regulatory and tax considerations
(a) GAAP and IFRS: Highlight the relevant accounting standards
under GAAP and IFRS that pertain to royalty accounting.

(b) Tax implications: Explain the tax treatment of royalty
income and expenses, including withholding taxes on cross-
border royalties.

7. Internal controls and audit

(a) Internal controls: Emphasise the importance of internal
controls to ensure accuracy in royalty reporting and to prevent
fraud.

(b) Audits and reviews: Discuss the role of audits in verifying
royalty calculations and compliance with agreements.

8. Technology and automation

(a) Royalty management software: Introduce software tools
that automate the calculation, tracking, and reporting of
royalties.

(b) Blockchain and smart contracts: Discuss emerging
technologies like blockchain for enhancing transparency and
efficiency in royalty transactions.

9. Practical applications and case studies
(a) Real-world examples: Use real-world examples together
with ones presented in textbook and case studies to illustrate
how royalty accounting principles are applied in practice.

Teacher’s Guide Form Five
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